International Journal of New Political Economy

International Journal of New Political Economy

Economic Diplomacy as an Instrument of Transition

Document Type : Original Article

Authors
1 M.A. Student, Faculty of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran
2 Assistant Professor, Department of Global Politics, Faculty of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran
Abstract
This study examines how economic diplomacy supports the transition of rentier economies toward sustainable development, emphasizing its importance for policymakers and scholars interested in the future trajectories of Gulf states. The objective is to explain how two Gulf rentier states with similar diversification goals have adopted different patterns of state behavior as they move beyond rentier dependency. The study adopts a comparative-exploratory design based on document analysis, a review of political economy literature, and descriptive analysis of FDI data. The findings show that the UAE has developed a facilitative, market-oriented model characterized by regulatory flexibility, free zones, legal predictability, global connectivity, and public-private risk sharing. Saudi Arabia, by contrast, follows a centralized, state-engineered, project-centered model led by sovereign institutions such as the Public Investment Fund (PIF) and large-scale initiatives such as Vision 2030 and NEOM. The article argues that successful post-rentier transition depends less on the scale of megaprojects than on the accumulation of institutional capital, including transparency, the rule of law, regulatory credibility, adaptive governance, and private-sector empowerment. The study concludes that sustainable development in the Gulf requires a gradual shift toward institutional equilibrium, in which state capacity, market participation, and credible regulatory frameworks jointly support long-term diversification and resilience.
Keywords

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Articles in Press, Accepted Manuscript
Available Online from 21 July 2026

  • Receive Date 26 December 2025
  • Revise Date 06 July 2026
  • Accept Date 21 July 2026
  • First Publish Date 21 July 2026
  • Publish Date 21 July 2026